Governor of the Romanian National Bank (BNR) Mugur Isarescu recommended banks with liquidity problems to get capitalized and to slow down lending, at the same time.
"There are some banks running within a vicious circle, as they do not hold state bonds, so that, in this context, we invite them to make an effort and resort to repo operations. This implies first capitalization efforts and also a supplementary effort to slow down lending", the BNR governor told a seminar on monetary policy on April 17.
The Central Bank’s official underscored in the interval ahead the credit institutions need to hold in their portfolio state bonds to account for 10-15 percent, for liquidity.
"The cautious policy must become a rule. The market index becomes now secondary to the banks, compared with such cautious policy. The banks need to reach to a normal balance sheet, with 10-15 state bonds to be registered with their portfolio," Isarescu said.
The BNR governor also showed the domestic banking system suffers from no major problem in terms of liquidity at the moment, with the minimum compulsory reserves representing an important liquidity resource too.
"The fact that we have a minimum compulsory reserve standing at 20 percent in lei and 40 percent in hard currency means there exists an important liquidity resource," the head of he central bank said.